The US’ first serious legislative attempt to tackle the climate crisis, the Inflation Reduction Act, is hitting its first anniversary both lauded for turbocharging a seismic shift to clean energy while also weathering serious attack from Republicans.
Joe Biden hailed the bill, which despite its name is at heart a major shove towards a future dominated by renewable energy and electric vehicles, as “one of the most significant laws in our history” when signing it on 16 August last year.
And the White House is trying to use the first year marker to extol it as a pivotal moment in tackling the climate emergency.
“It’s the largest investment in clean energy in American history, and I would argue in world history, to tackle the climate crisis,” John Podesta, Biden’s chief clean energy advisor, told the Guardian. “With any legislation it takes time to get traction, but this is performing above expectations.”
Podesta said there has been an “enormous response” in take-up for the tax credits that festoon the $369bn bill, directed at zero-carbon energy projects such as solar, wind and nuclear, grants for bring renewables manufacturing to the US and consumer incentives to purchase electric cars, heat pumps and electric stoves.
Here are the key points to know about the impact of the act so far as it approaches its anniversary on August 16:
A boom in clean energy investment
There has been around $278bn in new clean energy investments, creating more than 170,000 jobs, across the US in the first year of the Inflation Reduction Act, according to an estimate by the advocacy group Climate Power. The White House claims that there will be twice as much wind, solar and battery storage deployment over the next seven years than if the bill was never enacted, with companies already spending twice as much on new manufacturing facilities as they were pre-IRA.
“It’s been more impactful than I or other observers would’ve thought,” said James Stock, a climate economist at Harvard University.
Stock said that while the Inflation Reduction Act won’t by itself eliminate planet-heating emissions in the US, it is the “first substantive step” towards doing so and should help propagate the next generation of hoped-for clean fuels, such as hydrogen, in its 10-year lifespan. “As the tax credits are uncapped, too, we will see a lot more invested than we expected,” he said. “We could easily see $800bn to $1.2tn.”
More people are buying electric vehicles
The Inflation Reduction Act includes rebates of up to $7,500 for buying an electric vehicle, and this incentive appears to be paying off – EV sales are set to top 1m in the US for the first time this year. Moreover, over half of US drivers are considering an EV for their next purchase, polling has shown.
This transition isn’t without its hurdles, however – there has been a shortage of key parts in the EV supply chain, many models still remain prohibitively expensive and unions have been unhappy at the lack of worker protections for many of the new plants that are popping up. Climate advocates, meanwhile, have questioned why similarly strong support hasn’t been given to public transit or e-bikes to help get people out of cars altogether.
It will slash US emissions, but not by enough
The US is the world’s second largest emitter of greenhouse gases and the Inflation Reduction Act is widely forecast to slash these emissions, by as much as 48% by 2035, from 2005 levels, according to one analysis.
These forecasts have a relatively wide range of estimates due to uncertainties such as economic growth but even in the most optimistic scenario the US will require further measures if it is to get to net zero emissions by 2050, as scientists have said is imperative if the world is to avoid catastrophic climate impacts.
“Even though we passed the IRA you ain’t seen nothing yet,” said Chuck Schumer, the Democratic Senate leader, in promising a fresh climate bill recently. But given the riven nature of US politics, the prospects of such legislation is remote in the near term.
A more likely way to bridge the emissions gap will be a raft of regulatory actions by the Environmental Protection Agency, such as new standards to cut pollution from cars, trucks and power plants, as well as progress by individual states. “We basically need everything to go right,” said John Larsen, a partner at Rhodium group, an energy analysis organization
The IRA has so far escaped Republican cuts – but Biden is fighting to get credit
The legislation was a breakthrough moment following decades of obfuscation and delay by Congress despite increasingly frantic warnings by climate scientists over global heating, with the bill itself borne from months of torturous, comprise-laden negotiations with Joe Manchin, the coal baron senator from West Virginia who held a swing vote for its passage.
But the legislation has already faced the threat of repeal from Republicans, who universally voted against it, with the GOP’s first bill after gaining control of the House of Representatives this year gutting key elements of the Inflation Reduction Act. This is despite the majority of clean energy investments flowing to Republican-led districts.
Biden has also faced the ire of climate progressives for somewhat undercutting his landmark moment with an aggressive giveaway of oil and gas drilling leases on public land, including the controversial Willow oil project in Alaska, and for incentivizing the use of technologies such as carbon capture that have been criticized as an unproven distraction at a time when the world is baking under record heatwaves.
“Biden has an atrocious track record on fossil fuels, and that needs to change,” said Jean Su, an attorney and climate campaigner at the Center for Biological Diversity who called on Biden to declare a climate emergency. There needs to be a “sea-change in this administration’s approach” on the climate crisis, according to Jeff Merkley, a Democratic senator. “No more green lighting fossil gas projects. No more stalling on a climate emergency. Now is the time for us to live up to the full promise of the Inflation Reduction Act.”
Polling shows the majority of American voters disapprove of Biden’s handling of the climate crisis and only three in 10 have heard that much about the Inflation Reduction Act at all. Such perceptions will need to be turned around if the US president is to help secure the legacy of the bill in next year’s election.
“We are going at a record clip to try to address this climate crisis,” said White House adviser Podesta. “I know people want us to hurry up and I wish we could produce a net zero economy immediately but this is a global transition that’s never occurred in human history. We need to get this job done.”
The IRA act has not pleased leaders in the EU who have attacked it for being “protectionist” though some have argued they should instead be investing along similar lines.
Clean energy investment has gone to red states
No Republican voted for the Inflation Reduction Act but most of the investment that has been triggered by the bill has been funneled into projects in GOP-held Congressional districts. An emerging ‘battery belt’ is forming in the US south, with battery and electric vehicle plants popping up in states such as Georgia, Tennessee and Texas.
“The IRA has been absolutely critical for us in terms of giving market certainties to go bold and big in our investment,” said a spokeswoman for QCells, a solar manufacturer that has embarked upon a major expansion in Georgia.
Renewables are booming – but there’s a transmission bottleneck
If the future wasn’t renewables before the IRA, it certainly is now – more than 80% of new electricity capacity this year will come from wind, solar and battery storage, according to federal government forecasts. The framers of the legislation hoped it will create a sort of virtuous circle whereby more renewable capacity will push down the cost of already cheap clean energy sources, seeding yet further renewable deployment.
Solar panels may be dotting California and wind turbines sprouting off the east coast, but without the unglamorous build-out of transmission lines much of the benefits of the Inflation Reduction Act may be lost.
Not only is there a lack of physical poles and wires to shift clean energy from one part of the country to another, many clean energy projects are facing interminable waits, lasting several years, to be connected to the grid at all. There is more than 1,250 gigawatts of solar and wind capacity actively seeking grid connection, which is about equal to the entire existing US power plant fleet.
“Something’s going to have to change to get this deployment online,” said Larsen. “Beyond that it will be about building stuff at scale, very, very quickly.”
